General Cannabis to Create Retail Footprint by Acquiring Trees Dispensaries - Seite 2

Carl Williams, Chairman of the Board of General Cannabis, said, “This is a transformational acquisition for us. Over the past year, we have strengthened our team and our balance sheet to be able to capitalize on an opportunity like this. When we close this transaction, we anticipate that our consolidated revenue will at least triple. We expect to become cash flow positive from operations as all stores open and ramp. Equally important, we instantly develop a retail foundation and add personnel with deep retail experience.”

When the transaction closes, the senior leadership of Trees will become an important part of the General Cannabis team. Tim Brown, the founder and CEO of Trees, will become a member of General Cannabis’s Board of Directors and join the executive management team. Trevor Hoffman, co-founder and President of Trees, will also join the executive team. General Cannabis will change its name to Trees as soon after the closing as practicable, though it will retain its trading symbol CANN.

Steve Gutterman, CEO of General Cannabis, said, “Today’s announcement represents a massive step forward in executing on our rollup strategy. In acquiring Trees, we are adding a retail platform that is successful today and will be the backbone of future growth. Tim, Trevor and the Trees team bring incredible depth and know-how. They deeply and passionately care about their customers. And the name ‘Trees,’ which suggests health and growth and nature and, of course, cannabis – and has a passionate fan base – is a perfect representation of our combined vision.”

General Cannabis will acquire Trees for approximately $39.5 million of total consideration, or 2.2 times Trees’s 2020 revenue. Approximately 13%, of this consideration will be paid in cash over 24 months and 87% will be paid with General Cannabis common stock. The Company will issue 38,745,193 shares to Trees shareholders upon closing; the number of shares is calculated by dividing the stock consideration by $0.89 per share, the 15-day volume weighted average price from March 24^th – April 14^th.

To pay the cash at closing, the Company has expanded its convertible debt round by $2.3 million, to an aggregate of $6.9 million. In total, the Company has raised approximately $10 million over the past nine months. These funds have and will be used to strengthen the Company’s balance sheet and provide capital for growth opportunities like this acquisition.